easyjet vs ryanair financial analysis
Ryanair allows 10kg while EasyJet only 8. By swiftly adopting and adapting to advancements in technology, EasyJet can to a great extent counter the adverse impact of rising fuel costs, e. g. , the modern state-of-the-art aircrafts are significantly more fuel efficient in comparison to the older aircrafts of yesteryears. This helps a company to deal with situations during difficult times. The rate of unemployment in Europe is very high which means a major portion of European population cannot afford to travel by air. Partly, this is why the company commands the highest market share in the European low-cost airline market segment. 9 billion during 2011 and to Euro 3. Researchers say when the airline adopted this strategy, it succeeded because it was a blue ocean strategy no other airline had adopted this strategy before (Ryans 2009). 84-85). WebEasyJet and Ryanair have the first movers advantage in the industry over new entrants owing to their flexibility to lower their fare prices more easily compared to the full fare airlines. (2023, February 18). Comprehensively, the two organisations share almost similar strategies. One principal weakness of EasyJet is that it strives to keep fares low as well as focus on consumer satisfaction, and keeping balance between the two becomes difficult. In terms of on-time performance, easyJet performs in line with some of Europes top airlines, such as Ryanair (>92%), Aeroflot (>92%), or KLM (>90%). Secondly, primary airports often choose not to work with low fare airlines as the latter do not need many services like aerobridges, elaborate check-in-service which is preferred by full fare airline companies. easyJet Shares | Latest easyJet Stock News and Analysis 2023 From where the investors sit, Lisa and Mark might reject the project. easyJet The highest 12-month target stood at 900p while the lowest was 460p per share. 81%, 7. OConnell, J. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. Based at Londons Luton Airport, the company travels to more than 700 destinations and has a market presence in more than 30 countries (Mayer 2008). Choose skilled expert on your subject and get original paper with free plagiarism Because of its brand name, Ryanair also acts as barrier for new entrants in the European aviation industry. Their no frills strategy has been a core tenet of their low-cost strategy because both airlines do not accommodate passenger meals, pre-arranged sitting arrangements, or paper-based ticketing services (Malighetti et al. The two firms have witnessed a decline in gross margin. Therefore, a differentiated strategy is not exclusive. February 18, 2023. https://ivypanda.com/essays/ryanair-vs-easyjet-corporate-and-competitive-strategy-analysis/. This lack of personal service can induce people to opt for other low fare airlines. WebAn Analysis and Assessment of easyJets Strategy and Options 45 3.5.3 Leasing Costs Leasing costs are an important profitability driver for airlines 128.Over the review period, easyJet decreased its leasing costs from 3.4% of total revenues in 2010 to 2.7% in 2016. Dont Ryanair prefers to fly to secondary cities and pursue an outsourcing strategy to undertake its core production services, such as catering and aircraft maintenance (Mayer 2008). Social Airline profits are highly dependent on the behavioral and demand patterns of customers. Although revenues have picked up, profits continue to lag behind as a result of elevated fuel and labour costs. Wallach, B. Retrieved from https://ivypanda.com/essays/ryanair-vs-easyjet-corporate-and-competitive-strategy-analysis/. easyJet Vs. Ryanair: The Curious Case Of Therefore, a key part of their strategy is meeting the minimum contractual obligations required by airlines to their customers. Ryanair also emphasizes on providing the most efficient customer service compared to other rival airlines. EasyJet EasyJets strength lies in its strategically low fare air service. In Europe, major airline companies, such as Flybe, Wizz Air and Aer Lingus, dominate this space (Dobruszkes 2006). This is because people tend to lose confidence over low fare airlines regarding their security system. WebOn the basis of financial fundamentals, Ryanair is stronger than EasyJet in terms of 12 to 0. Half of its seating capacity is in such facilities. EasyJets Net Current Assets to Sales i. e. , Working Capital to Sales ratio suggests that the company manages its debtors and creditors very efficiently. & Williams, G. 2012, Air Transport in the 21st Century: Key Strategic Developments, Ashgate Publishing, Ltd., New York. However, a closer scrutiny of the working capital level of the two airlines reveal a different a scenario as opposed to the popular belief of Ryanair being the better managed airline of the two. There also exists internal rivalry between low fare airlines like Ryanair and EasyJet. In case of potential new entrant in the low fare segment, the strategy adopted by EasyJet and Ryanair thwarts competitions and renders entry of new companies financially unviable. One common economic factor that affects a low fare airline like Ryanair is overbooking by customers and their compensation later on. Raccomandazioni degli analisti su EASYJET PLC: 27/04: easyJet plc: JPMorgan cambia rotta e passa a un giudizio Neutral Chief Financial Officer & Director: Stephen Alan Michael Hester 4 601: SINGAPORE AIRLINES LIMITED: 5.06%: 28 092: AIR CHINA LIMITED: 0.86%: 21 445: DELTA AIR LINES, INC.-0.33%: 21 317: RYANAIR To attract more customers EasyJet must also concentrate on designing user-friendly websites for easy booking experience. Although Easyjet borrowed its strategic focus from Southwest Airline, its market strategy differed from Southwest because instead of relying on sales agents to make sales, the Airline relies on a direct sales strategy (Sull 1999). Ryanair does not take the services of primary airports to avoid high airport charges and opts for regional airports. Financial summary Headline loss before tax of 178 million (2021: 1,136 3 millions. The unstable political scenario in the Middle East is in a perpetual war like condition. The return on shareholders funds also is seen closely identical ranging between 0. There are some infrequent environmental issues that can disrupt services of airlines like volcanic eruptions, pandemics ike swine flu and government regulations like reduction of carbon emissions. After the terrorist attacks in America people have become anxious regarding traveling by air, and such threats of terrorist attacks can further influence flight demands of European airlines including EasyJet. In this case, Ryanair does better than EasyJet. Environment Airline services can be drastically disrupted by natural calamities, for instance the 2010 Eyjafjalla volcanic eruption in Iceland disrupted European air space for several days. Need a custom Compare & Contrast Essay sample written from scratch by Comparative Financial Analysis of Easyjet & Ryanair - GraduateWay Over the last four quarters, easyJet's revenue has decreased by 48.8%. This shows that Ryanair can make reasonable profits from its sales. Porters 5 forces analysis of Ryanair Threat of new entrants In the European aviation industry new entrants face the disadvantage of limited airport slots as these are mainly accessible to established airlines like Ryanair. 59% for years 2010, 2011 and 2012. WebFinancial Analysis Profitability & Shareholder Returns Ryanair, perhaps Europes best-known low-cost airline, has also consistently been among the continents most profitable. IvyPanda. In EasyJet air travel there is no arrangement for free meal services in flights that are not longer than 2 hours (EasyJet Airline Company Limited, n. d. ). Through this strategy, Ryanair became less concerned about existing competition because it was operating in a unique market segment that other airlines had not used before (Ryans 2009). Ryanairs reliance on secondary and regional airports is a huge cost cutting strategy on their part, but it also has the added situational disadvantage since most regional airports are situated far away from passenger destinations. Social Unlike other low fare airlines that focus primarily on leisure travel, EasyJet has discriminated by targeting both business and leisure travelers.